Airtel profit hit by tighter operating conditions in India

Airtel reported a 72 per cent decline in net income in Q412– its twelfth straight quarterly profit decline – as the India-based mobile giant was hit by higher costs and on-going pricing pressures.

Net income for the quarter ending December 31 fell to INR2.84 billion (US$53 million) from INR10.11 billion a year ago. Sales were up 9.5 per cent to INR202.4 billion.

Profit was hit by higher depreciation costs, interest payments, forex losses and tax provisions.

“Market conditions have been challenging in recent quarters due to pricing pressures and rising input costs, which have put enormous pressure on the sector and consequently the margins,” said Airtel chairman Sunil Bharti Mittal.

The pressures in Airtel’s home market were offset slightly by the results from Africa. Airtel’s Africa revenues grew by 15 per cent, supported by a 21 per cent rise in mobile customers, a 42 per cent rise in voice traffic, and non-voice revenue growth of 85 per cent.

Airtel’s total customer base grew by 7.8 per cent year-on-year to 262.3 million, but was down slightly on a sequential basis (-0.1 per cent).

Mobile subscribers at the India and South Asia unit grew by 4.1 per cent to 189.4 million, while Africa mobile subs rose to 61.7 million.